Per the Mortgage Bankers Association’s (MBA) survey through the week ending May 5th, total mortgage activity increased 6.3% from the previous week and the average 30-year fixed-rate mortgage (FRM) rate fell two basis points to 6.48%. The FRM rate has risen 18 basis points over the past month.
The Market Composite Index, a measure of mortgage loan application volume, rose by 6.3% on a seasonally adjusted (SA) basis from one week earlier. Purchasing activity increased 4.8%, while refinancing activity increased 10.0% week-over-week.
Purchasing activity has remained muted this spring due to affordability issues in the market. The seasonally adjusted purchase index was 32.0% lower than one year ago. Refinancing activity has seen a slight increase over the past month as interest rates have stabilized around 6.5%; the seasonally adjusted refinancing index is down 44.5% from one year ago.
The refinance share of mortgage activity rose from 27.2% to 28.0% over the week, while the adjustable-rate mortgage (ARM) share of activity decreased to 6.8% from 7.3%. The average loan size for purchases was $440,700 in the first week of May, up slightly from $435,600 over the month of April. The average loan size for a FRM rose to $363,400 in the first week up May; this amount as risen for seven consecutive months. The average loan size for refinancing grew by 5.5% from $263,300 over the month of April to $277,900 in the first week of May.
Despite the recent affordability issues, mortgage activity continues to increase, likely due in part to the availability of construction loans. In turn, this gives hopeful homeowners more ways to finance their dream home and build a stable financial future. Check out BuilderLoans.net I think this is something they would be able to help you with your next home construction.